With many payment processors classifying nonprofits as high-risk merchants, it can be difficult to find merchant services for your nonprofit. Few processors offer high-risk merchant accounts, and those that do typically charge higher-than-average fees or force you to sign long-term contracts.
Not only that, but many payment processors focus primarily on in-person transactions, so you might not get any e-commerce functionality at all. This means that you won’t be able to take online donations. Others rely on third-party integrations that come with an extra monthly cost.
Fortunately, not every merchant services provider operates this way. Some credit card processors actually offer discounted rates for nonprofits, while others give you great software suites that can help you manage your donations.
I’ve researched dozens of credit card processors to find the best services that offer the software and equipment nonprofits need. Some of these even offer month-to-month contracts, so you need never be stuck with a suboptimal provider if your nonprofit’s financial health changes.
Short on Time? These Are the Best Credit Card Processors for Nonprofits in 2023
Stax – An all-in-one payment platform with powerful software included in the monthly fee.
Payment Depot – Industry-leading secure payments with 24/7 risk monitoring.
What We Look For in the Best Credit Card Processing Companies for Nonprofits
Nonprofits have specific needs from payment processors. I focused on the following features when researching different services for this article:
Budget-friendly rates. When most of your funding comes from donations, you can’t afford to lose a significant chunk of your income to your payment processor. Every vendor on this list has highly competitive rates or may be able to offer a discounted rate for nonprofits.
E-commerce software. Whether it’s built-in or integrated, every credit card processor on this list has e-commerce software that makes it simple to take donations online.
Marketing integrations. The processors on this list can be integrated with digital marketing tools like Customer Relationship Management (CRM) software and email marketing services. This will enable you to create a powerful donation pipeline with only a few clicks.
Free Point of Sale (POS) hardware. Whether you already take in-person donations or you want to start doing so, a free terminal helps to reduce your costs while making it easy for donors to contribute.
Surcharging. Surcharging allows you to pass the per-transaction costs of credit card processing onto your donors, which can significantly reduce your payment processing bill.
A Note on Nonprofit Merchant Accounts
While many payment processors will classify your nonprofit as high-risk and charge you higher-than-average fees, some processors actually offer discounted fees for nonprofits. If you are offered a discounted rate, make sure you get this confirmed in writing and check your contract carefully for any hidden fees.
You also need to ensure that your merchant account is set up with the right merchant category code. This is because some credit card providers charge lower interchange rates to charitable organizations, helping to reduce your overall processing costs.
Stax is an all-in-one payment processing solution that offers savings of up to 40% compared to traditional interchange-plus processors. Every Stax merchant account comes with Stax Pay, which allows you to manage all of your payments, create e-commerce shopping carts, and easily set up recurring payments on the Ultimate plan.
What’s more, Stax’s software is included in the monthly fee, making it a great choice for nonprofits that need a variety of software to manage their online donations. Many payment processors add on extra monthly fees to access essential software (and typically don’t advertise this), so it’s nice to see Stax include this as standard.
Nonprofit merchant accounts can also get a free terminal for in-person donations. If you need more terminals, you can also download Stax’s mobile app to your smartphone or tablet to use your device as a virtual terminal. This will allow you to set up new donors on Stax Pay or process payments from existing donors that have payment information saved on their accounts.
Features and Benefits
Reporting and analytics software. Keep an eye on your nonprofit’s financial health thanks to Stax’s fantastic reporting and analytics software. You’ll be able to track your sales over time, manage your staff (or volunteers), track donation habits by donor, and more.
Thousands of software integrations. While Stax only has a few integrations built in, you can connect to thousands of applications through its integration with Zapier. This makes it easy to connect Stax to your workflow and create seamless online donation pipelines.
Fraud protection. In addition to helping your nonprofit become PCI compliant, Stax will put risk holds on customer accounts that need additional verification.
Credit card surcharging. For an extra fee, you can pass on the per-transaction cost of processing donations to your donors. While you’ll still have to pay the monthly fee, this can help to significantly lower your processing costs.
Payment Depot’s outstanding security features keep both you and your donors secure. Not only does it comply with the highest level of PCI compliance itself, but its 24/7 technical support team will help you achieve compliance as well. What’s more, every transaction is protected by end-to-end encryption and payment tokenization, ensuring that sensitive information is completely obscured before it’s transmitted.
Payment Depot is also GDPR compliant, even though as a US-only credit card processor it isn’t legally required to comply with this EU privacy law. Still, it voluntarily does so to keep all of your and your donors’ information as safe as possible.
Payment Depot also has a great track record for security. Neither this processor nor its parent company Stax has suffered a data breach to date.
On top of that, you stand to save hundreds of dollars on your processing bill with Payment Depot. Its subscription-style pricing plans are cheaper than those offered by Stax, so smaller nonprofits can still get a great deal on their payment processing.
Features and Benefits
24/7 risk monitoring. Payment Depot has a team of fraud experts on hand that monitors changes in bank policy and fraud methods to reduce your chargeback and fraud risks.
Free terminal. You’ll get a free Dejavoo terminal to handle in-person donations. This terminal accepts debit/credit cards, NFC payments, and can capture signatures for non-EMV cards.
E-commerce integrations. Payment Depot has built-in integrations for popular e-commerce platforms like Shopify, WooCommerce, Magento, and more. If you have an existing website, you can integrate Authorize.net’s payment gateway to handle incoming donations.
Discounted Clover hardware. Clover offers smart POS devices and industry-leading software suitable for all kinds of nonprofits. These devices aren’t always budget-friendly for non-profits, but accessing them at a discount through Payment Depot may make them more accessible for your organization.
Leaders Merchant Services (LMS)’s interchange-plus pricing makes it easy to maintain your nonprofit’s financial health. While there’s no advertised discount for nonprofits, LMS offers some of the lowest rates in the industry. Customer reviews show that rates vary depending on the payment solution you need, so it’s entirely possible to negotiate a discounted rate.
In addition, LMS offers merchant cash advances as a flexible funding option. You pay this back through a small commission on future donations, so you don’t need to put up collateral or adhere to strict payment deadlines. This is ideal if your nonprofit ever needs a quick finance injection.
Unfortunately, LMS has lengthy contracts and early termination fees. This probably won’t be a deal-breaker if you’re happy with its rates, but it’s not ideal if you want the flexibility to move to a different payment processor should your nonprofit’s needs change.
Features and Benefits
High approval rate. LMS boasts a 96% approval rate, and in many cases offers same-day approvals. If you’ve struggled to open a merchant account for your nonprofit in the past, there’s a good chance you’ll be accepted by LMS.
Free hardware. Depending on the length of your contract, LMS will provide you with a free First Data FD150 terminal.
Authorize.net. This popular payment gateway and virtual terminal allows you to accept payments online and over the phone. It also comes with advanced fraud protection measures and its own customer support channels. You will need to pay an additional monthly fee to use this software suite, however.
Recurring payments. LMS offers subscription tools that will let you set up and manage recurring payments. This ability may come at an additional monthly fee, but it’s a great feature for securing ongoing donations.
Flagship Merchant Services is a great choice for nonprofits that need to get set up quickly and easily. It takes less than five minutes to apply, and you’ll be guided through the onboarding process by a dedicated sales representative. During the application process, you’ll be able to negotiate the best pricing for your nonprofit, so it’s worth asking if there are any discounts for nonprofits. You won’t need stacks of documentation either, making this one of the easiest credit card processors to get started with.
Once you’ve applied, you’ll normally need to wait up to 2 business days to be accepted – however, some businesses can be approved in as little as a few hours. You can then start processing donations the next business day, which is significantly faster than many other payment processors.
You’ll receive your donations within two business days, but you can expedite this with Flagship’s same-day funding option. You’ll have to pay extra for this service, but it’s well worth it if your nonprofit relies on a steady flow of donations to operate most effectively.
Features and Benefits
“Free” terminal. Once you sign up with Flagship, you’ll be eligible to receive a free Clover Mini or Verifone terminal. You’ll have to pay a small monthly fee for terminal insurance and maintenance, plus an extra monthly fee for Clover’s software – but not many other payment processors offer this sophisticated hardware for free.
iAccess 3.0 business portal. This business management portal is included with your monthly fee and provides you with sales summaries, expense reports, and account activity. It can also analyze customer reviews and industry statistics to show you where your nonprofit needs to focus its marketing efforts.
Recurring payments. You can set up subscriptions and recurring donations through Flagship’s virtual terminal. You will have to pay an additional monthly fee to use the terminal, but it’s well worth it if you regularly handle recurring donations.
Meet or Beat Guarantee. If Flagship can’t save you money on your current processing costs (or match it), it’ll give you a $200 AMEX gift card. Even if you think you’ve got a good deal with your current processor, it’s worth getting a quote from Flagship to see if they can match or beat your existing rates.
If you receive most of your donations in person, then Luminous Payments has a lot to offer.Luminous Payments offers a free Bluetooth card reader to every merchant, which connects to your smartphone and can take NFC and magnetic swipe transactions. This is ideal if your nonprofit regularly takes donations at community events, for example.
Luminous Payments offers free reconfiguration of your existing POS hardware too, provided it’s not locked to your current payment provider and meets modern security standards. This service isn’t offered by many payment processors, so it’s a great deal if your nonprofit already has its own POS hardware.
Even if you don’t collect many donations online, it’s worth paying the small monthly fee to use the NMI gateway and virtual terminal. This allows you to set up unattended donation points using QR code payments, so you can take donations even when your office is closed.
Features and Benefits
Next-day funding. Every Luminous Payments merchant account gets next-day funding, which is ideal for nonprofits that need a steady cash flow. You can also pay an extra monthly fee for same-day funding.
Flexible pricing. Luminous Payments offers five different payment options: interchange-plus, flat rate, tiered pricing, cash discount (surcharging), and custom rates. With so many options available, there’s a good chance you’ll be able to save money on credit card processing fees by choosing the right plan for your nonprofit.
Free compliance support. This payment processor doesn’t charge any fees for helping you to achieve PCI compliance.
Guaranteed savings program. Luminous Payments will pay you an impressive $1,000 if it can’t save you money on your current processing fees.
CreditCardProcessing.com’s pricing offers subscription-style pricing offers great savings for nonprofits. Even with the high transaction fees on the Starter plan, the low $15 monthly fee is impressively low, making it a good choice for nonprofits that take less than $2,500 in donations each month. As you start processing more donations, you can get a discounted flat rate in return for a higher monthly fee.
But the biggest benefit is CreditCardProcessing.com’s partnership with Vindicia. Vindicia is a subscription management platform that keeps track of recurring donations and offers insights for donor retention. You’ll also get Vindicia Retain, which automatically attempts to fix failed transactions. This can rectify up to 30% of failed payments, helping you to recover donations that would otherwise be lost.
With that being said, CreditCardProcessing.com isn’t ideal if you need a steady cash flow. You’ll have to wait 2-3 business days to receive your donations, and there’s no option to pay a fee for faster deposits.
Features and Benefits
High approval rate. CreditCardProcessing.com often overlooks low credit scores and doesn’t charge higher fees to high-risk merchants, which is good news for nonprofits.
Free terminal. You can get a free Pax or Clover Mini terminal, depending on the plan you choose. Neither device is cheap to purchase outright, so getting one for free is a great bonus if you accept in-person donations.
24/7 multi-channel support. CreditCardProcessing.com offers 24/7 support via email or phone, so you’re covered if something goes wrong outside of working hours.
Data breach insurance. If CreditCardProcessing.com suffers a data breach and you suffer any financial losses as a result, you’re covered for up to $100,000 worth of damages.
Pick the Best Credit Card Processing Company for Your Nonprofit
Because you’ll always have to pay a fee on each incoming donation (unless you’re using surcharging), it makes sense to find the cheapest payment processing solution for your nonprofit. However, with many credit card processors also including powerful business software in their standard payment packages, cheaper isn’t always better.
If your nonprofit needs business management software, thenI recommend Stax. You’ll get the latest e-commerce solutions, analytics, and management software included in the monthly fee. Plus, its subscription-style pricing is ideal if you handle a large volume of incoming donations.
However, if Stax’s monthly plans are out of your budget, then take a look at Payment Depot. It’s a subsidiary of Stax, so you’ll get the same great e-commerce features for a lower monthly fee. Payment Depot’s voluntary compliance with GDPR is also a great sign that it takes data security seriously.
With that being said, interchange-plus pricing can be more beneficial for smaller nonprofits. If this is you, I recommend Leaders Merchant Services. With some of the lowest interchange-plus rates in the industry and flexible funding options available, LMS helps smaller nonprofits to make the most of their incoming donations.
If you’re still struggling to decide, here’s a quick comparison of our top merchant services for nonprofits.
Monthly fee on cheapest plan
Transaction fees on cheapest plan
All-in-one payment platform offering powerful business software
Modern nonprofits that process most of their donations online
PayPal isn’t ideal for nonprofits. Even though it offers a discounted fee for nonprofits, its fees are still high compared to many credit card processors. Stax’s recurring payments and e-commerce features easily rival PayPal’s software, and even though Stax charges a monthly fee, its much lower transaction fees mean you’ll likely make considerable savings over time.
Yes, nonprofits have to pay credit card processing fees. However, some processors may offer a discounted rate to qualified nonprofits, as well as additional benefits like business management software, free hardware, and 24/7 support. You can often save money overall by signing up with a credit card processor that includes these additional services in its fees.
Can I pass on credit card fees to customers?
In some cases, you can pass credit card fees to customers. For example, Luminous Payments offers a surcharge program, which allows you to transfer the cost of credit card processing to your customers and donors so you only have to pay the monthly fee. However, to stay legally compliant, you must display signage that makes your donors and customers aware of this.
Emma is a freelance content writer who specializes in thoughtful and insightful blogs and articles. Her main passion is the intersection of human behavior and modern technology, particularly in the context of marketing and cybersecurity. Outside of work, Emma loves video games, superhero movies, crochet, and cuddling her German Shepherd.